In an important editorial opinion piece in the WSJ today entitled "Why Obama's Health Plan is better", the health plans of both candidates are examined, primarily from the aspect of which is better for business:
Sustained growth thus requires successful health-care reform. Barack Obama and John McCain propose to lead us in opposite directions -- and the Obama direction is far superior.
Obama's plan will reduce business sector costs and promote job growth. The McCain plan introduces a tax on benefits to employers providing health insurance, which studies have shown will force 20 million people off the rolls.
This information is important to send to all swing voters you know, especially those who own small businesses, who may have concerns about what Obama's plans mean for their bottom line.
The article finds that Obama's plan will lead to improvements and new efficiencies in the health system. In addition to the benefits to the individual and the family, their study finds that there are huge benefits to the business sector:
Given the current inefficiencies in our system, the impact of the Obama plan will be profound. Besides the $2,500 savings in medical costs for the typical family, according to our research annual business-sector costs will fall by about $140 billion. Our figures suggest that decreasing employer costs by this amount will result in the expansion of employer-provided health insurance to 10 million previously uninsured people.
In addition, the lower cost of benefits will promote job growth, their assessment is that it will allow:
employers to hire some 90,000 low-wage workers currently without jobs because they are currently priced out of the market. It also would pull one and a half million more workers out of low-wage low-benefit and into high-wage high-benefit jobs. Workers currently locked into jobs because they fear losing their health benefits would be able to move to entrepreneurial jobs, or simply work part time.
In contrast, they find that the McCain plan, which would include a tax on health benefits would lead employers to drop coverage for 20 million Americans:
His plan would raise taxes on workers who receive health benefits, with the idea of encouraging their employers to drop coverage. A study conducted by University of Michigan economist Tom Buchmueller and colleagues published in the journal Health Affairs suggests that the McCain tax hike will lead employers to drop coverage for over 20 million Americans.
This is important, I repeat, the first thing a McCain health plan would do would be to have 20 million more people not have health insurance.
This figure was also highlighted in the study by Health Affairs:
Eliminating the tax exclusion would greatly reduce the number of people who obtain health insurance through their employers. This decline would be driven by three factors: the effective price of employer-sponsored coverage would increase, the nondiscrimination rules would no longer apply, and low-risk employees would have less incentive to remain in employer-sponsored groups...the elimination of the income tax preference for employer-sponsored insurance would cause twenty million Americans to lose such coverage.
McCain would give these people a tax credit ($5,000) but the estimated cost of buying your own family's health insurance is around $12,000. So the McCain plan would force folks to pay $7,000 for their own health insurance, because their employers could no longer afford to pay for their employees insurance, because McCain taxed them. And this is just the healthy folks, those with pre-existing conditions could be denied care altogether in the open market.
Ezra Klein analyzes the Health Affairs article and summarizes:
McCain's health care plan would increase taxes on employer based health insurance and price 20 million plus Americans out of the coverage they currently rely on. In return, he'd give them a tax credit that is not indexed to health costs, and will become worthless as the years pass. He'd push them into the individual market, where higher administrative costs and underwriting practices mean that if individuals try to purchase the exact policy offered by their employers, they will pay $2,000 more per year. In addition, the sick can be turned away, and the state regulations that ensure some minimum level of benefits will be dismantled. All this will cost us $1.3 trillion over 10 years, and set the rules so that more of the expense falls on the sick and less rests on the healthy.
DIGG the WSJ story here